European operators of large and underused LNG terminal capacity bet on new uses for their product in ships and vehicles to absorb future arrivals from the global market, the group's president Wim Groenendijk said on Sept. 27.
While terminals only ran at one-fifth of their capacity in 2016, GLE expects the EU's drive for environmentally friendly energy will help make them busier and absorb a wave of LNG from new origin points such as the U.S. in coming years.
The European Commission has started to acknowledge that gas has a bigger role to play in decarbonization, Groenendijk said on the sidelines of a conference.
"There appears to be a shift away from a dogmatic anti-fossil fuels vision," he said.
The 28-nation bloc aims to reduce greenhouse-gas emissions by 40% by 2030 over 1990 levels. Transport is one of the identified areas for action.
And GLE sees new markets developing for LNG as a fuel for ships and trucks.
"That is an exciting growth option," said Groenendijk, referring to research from Poyry consultancy firm.
Andrew Morris, who heads Poyry's gas and oil focus group, was at the conference. He said the two sectors could consume 15 billion cubic meters (Bcm) of gas in the EU by 2030 compared with the current 1 Bcm consumption.
Suppliers have begun to respond. Dutch pipeline operator Gasunie has built new LNG fueling facilities for small ships in the Netherlands and for sector peer Fluxys in Belgium.
The infrastructure will help ship owners meet stricter sulfur norms for bunker fuels when navigating the Baltic and North seas.
LNG is also used to fuel heavy trucks, buses and cars.
GLE data showed about 221 Bcm of regasification capacity is presently available per annum. This is half the size of Europe's total gas consumption and another 29 Bcm is under construction.
Groenendijk said that even if European gas demand remained flat, its indigenous production was going down. "This will be more significant than changes on the demand side," he argued.
Also, the flexible role that LNG could play was reason enough to bank on its future. Traders would be able to draw on the optionality of short-term supply to the benefit of consumers.
When initial plans were launched for creating an LNG terminal in Lithuania, which is now in action, local gas prices dropped by 20%.
"The same applies for U.S. LNG," Groenendijk said.
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